AMERISAFE, Inc. (AMSF Quick QuoteAMSF - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of 74 cents, which outpaced the Zacks Consensus Estimate by 12.1%. However, the bottom line fell 11.9% year over year.

Operating revenues of $74 million remained flat year over year. The top line fell short of the consensus mark by 1.7%.

The quarterly results benefited on the back of higher gross premiums written, an increase in voluntary premiums due to expanding policy count coupled with favorable payroll audits and related premium adjustments. Sound investment results also contributed to the upside, which was, however, partly offset by softer underwriting results and an elevated expense level. 

Q4 Performance

AMSF’s net premiums earned dipped 0.5% year over year to $65.7 million in the quarter under review and missed the consensus mark of $67 million.

Net investment income amounted to $8.08 million, which improved 5.7% year over year on the back of an increase in fixed-income reinvestment rates. The figure missed the Zacks Consensus Estimate of $8.12 million.  Fee and other income dropped 19% year over year.

AMERISAFE’s pre-tax underwriting profit fell 20.2% year over year to $9.5 million.

Total expenses of $56.2 million increased 3.8% year over year in the fourth quarter due to higher underwriting and other operating costs and policyholder dividends.

Operating net income was $14.3 million, which tumbled 11.4% year over year.

The net combined ratio deteriorated 350 basis points (bps) year over year to 85.5% but came lower than the consensus mark of 89%. The metric was hurt by a deteriorating net underwriting expense ratio and net loss ratio.

Financial Update (as of Dec 31, 2023)

AMERISAFE exited the fourth quarter with cash and cash equivalents of $38.7 million, which plunged 37.1% from the 2022-end level.

Total assets of $1.2 billion fell 3.2% from the figure at 2022 end.

Shareholders' equity declined 7.9% from the 2022-end level to $292.5 million.

Book value per share was $15.28 as of Dec 31, 2023, which slipped 7.8% year over year.

Return on average equity of 24.4% improved 30 bps year over year in the quarter under review.

Capital Deployment Update

AMERISAFE bought back shares worth $2.2 million in the fourth quarter. A leftover capacity of $10.4 million remained under its share repurchase authorization as of Dec 31, 2023.

Management sanctioned an 8.8% hike in the regular quarterly dividend. The increased dividend was 37 cents per share, which will be paid out on Mar 22, 2024, to its shareholders of record as of Mar 8, 2024.

Full-Year Update

AMERISAFE’s adjusted EPS fell 5.2% year over year to $2.91 in 2023. Total revenues of $306.9 million improved 4.1% year over year.

Net premiums earned of $267.1 million decreased 1.7% year over year. Net investment income advanced 15.1% year over year to $31.3 million.

AMSF reported a pre-tax underwriting profit of $37.6 million in 2023, which declined 15.8% year over year. The net combined ratio deteriorated 230 bps year over year to 85.9%.

Zacks Rank

AMERISAFE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported fourth-quarter 2023 results so far, the bottom-line results of Arch Capital Group Ltd. (ACGL Quick QuoteACGL - Free Report) , Employers Holdings, Inc. (EIG Quick QuoteEIG - Free Report) and American International Group, Inc. (AIG Quick QuoteAIG - Free Report) beat the respective Zacks Consensus Estimate.

Arch Capital reported fourth-quarter 2023 operating income of $2.49 per share, which beat the Zacks Consensus Estimate by 28.4%. The bottom line increased 16.4% year over year. Gross premiums written improved 12% year over year to $4.3 billion. Net premiums written climbed 7.4% year over year to $3.3 billion. Net investment income increased 73% year over year to $313 million.

Operating revenues of $3.7 billion rose 24.5% year over year. It beat the consensus estimate by 0.2%. ACGL’s underwriting income dropped 2.6% year over year to $715 million. The combined ratio improved 310 bps to 78.9. Gross premiums written in the Insurance segment increased 17.6% year over year to $1.9 billion. Net premiums written in the Reinsurance unit rose 0.9% year over year to $1.6 billion.

Employers Holdings’ fourth-quarter adjusted EPS of $1.40 surpassed the Zacks Consensus Estimate by 40%. The bottom line improved 12% year over year. Total revenues grew 1.8% year over year to $225.7 million. The top line beat the consensus mark by 5.8%. Gross premiums written of $178.2 million advanced 3% year over year. Net premiums written of $176.4 million increased 3% year over year.

Net premiums earned amounted to $187.5 million, which improved 4% year over year. Net investment income slipped 3% year over year to $26.2 million. EIG reported an adjusted net income of $36.1 million in the quarter under review, which grew 5% year over year. Policies in force were at a record level of 126,409 as of Dec 31, 2023, which increased 4.2% year over year. The combined ratio improved 250 bps year over year to 88.1%

AIG reported fourth-quarter 2023 adjusted EPS of $1.79, which outpaced the Zacks Consensus Estimate by 12.6%. The bottom line jumped 31.6% year over year. Operating revenues inched up 4.6% year over year to $12.7 billion in the quarter under review. The top line beat the consensus mark by 9.7%. Premiums fell 9.9% year over year to $8.5 billion in the fourth quarter.

Total net investment income of $3.9 billion climbed 20.7% year over year. Adjusted return on common equity of 9.4% improved 190 bps year over year in the quarter under review. Net premiums written in AIG's General Insurance segment amounted to $5.8 billion in the fourth quarter, which grew 2.6% year over year. Underwriting income increased 1.1% year over year to $642 million. The unit’s combined ratio of 89.1% improved 80 bps year over year.